The Department of Health and Human Services has asked the Supreme Court for an extension to file a response to the American Hospital Association's request for a judicial review regarding site neutral payments.
The government response was due by March 15, but on March 3 Norris Cochran, acting Secretary of Health and Human Service, asked for an extension until April 14, according to court documents.
In February, the Supreme Court acknowledged the AHA's request for judicial review of an appeals court decision siding with HHS's decision to reduce payments to off-campus facilities.
WHY THIS MATTERS
At stake for hospitals was the loss of an estimated $800 million in revenue in 2020, at a time when health systems were and continue to face financial challenges due to the COVID-19 pandemic.
THE LARGER TREND
The Bipartisan Budget Act in 2015 authorized CMS to impose site-neutral payments but grandfathered existing hospital outpatient facilities.
In November 2019, the Centers for Medicare and Medicaid Services decided to move forward with a two-year phase-in of site-neutral payments despite a decision in the district court earlier in the year siding with hospitals in their fight to keep the higher outpatient payments for off-campus facilities.
HHS appealed the decision, but in December 2019, the Centers for Medicare and Medicaid Services said it would repay hospitals for cuts made in site-neutral payments by automatically reprocessing calendar year 2019 claims for hospital outpatient services provided in off-campus provider-based departments that had been grandfathered under the Bipartisan Budget Act of 2015. The amount was estimated at $380 million for 2019.
In July 2020, the U.S. Court of Appeals in the District of Columbia said HHS had the authority to reduce the payments. The court decision meant CMS would now be paying formerly grandfathered off-campus outpatient departments run by hospitals at the same lower rate as physician clinics.
Hospitals asked the Supreme Court for a judicial review, seeking to have the ruling overturned.
The significant difference between Medicare payments to hospital outpatient facilities and independent offices has encouraged hospitals and health systems to buy physician practices, but a study has noted that good research about this has been lacking up to now.
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